It’s tough to tell whether it’s harder to be a retail chain or a customer right now.
As a customer, you’ve probably dealt with a fair few set of issues.
Rising prices, a gross consolidation of retail options, and constantly out-of-stock items can make shopping feel like a difficult task.
During the month of May 2025, for example, the cost of several essential items and services were up significantly.
Both food at home and food away from home rose 0.3% over just a one month period. Shelter also rose by 0.3% on the month, and electricity rose by 0.9%.
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When everything from the cost of groceries to heating and cooling to housing is up, many customers turn to large retail chains in search of savings.
But things haven’t been easy for those chains, either. A higher cost of goods and services means that doing business gets more expensive.
And when the looming threat of tariffs makes business harder to navigate, retailers get skittish about slashing prices.
But competition is hot across the industry. If you’re a retailer and you don’t lower prices, you risk losing your customer base to your biggest competitors.
And if you lower prices too much, profit can suffer.
It’s a delicate balance that’s constantly shifting, and it doesn’t look like it’s getting much easier anytime soon.
Discount retailers have tricky issue
Finding the right price point is especially challenging in the discount retail space.
While customers at pricier, upscale stores tend to be more price-resistant, those shopping at a discount retailer expect rock-bottom prices.
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And they tend to be savvy shoppers. So they know when they’re getting ripped off.
And now that most towns in the U.S. have at least a handful of shopping options, customers are now more likely than ever to ditch their previous store for one with better prices.
This means that discount retailers can’t rely on their brand name or customer loyalty to carry them through hard times.
So it often results in something of a race to the bottom, whereby value chains are in constant competition with one another to offer the lowest possible prices.
But this puts them in direct opposition to profit, particularly as goods from countries like China are getting more expensive due to tariffs.
Popular discount chain closing stores
Sometimes, this situation gets untenable, and a chain is forced to make store closures.
Popshelf, the popular discount store aimed at teens and young adults, is one such chain.
The store bills itself as a luxury or upscale dollar store, selling things like home decor, cosmetics, household essentials, and gourmet treats.
Most of its inventory is $5 or less, and it comes and goes quickly.
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The faster shelves are restocked with new and exciting inventory, the more likely it is to sell quickly. But keeping imported goods, loss leaders, or just a lot of inventory on hand is a risky venture.
And now Popshelf is closing about 45 stores, which represents roughly 20% of its total footprint.
Popshelf is owned by Dollar General, which is also closing nearly 100 stores in unprofitable areas.
Dollar General plans to convert about six Popshelf stores into Dollar General outlets.
The company has not stated where these closures will occur; however, some customers have reported seeing sales at their local Popshelf, with up to 50% off.
